New York Times stock (NYT) has gone way ahead of itself. Since reporting an 80% jump in digital subscribers for the year 2016, and a 65% jump in Q1 2017, the stock price has increased 62% which added $1,085 million to the company's market cap.
We believe that the stock has overreacted to the impressive subscribers' growth, which even if it isn't temporary, doesn't have the ability to lift the stock price further from current levels.
That's because the $1.085 billion in market cap the digital subs added is slightly less than the value this segment can generate at its best-case. To get a clearer picture, we've done a DCF analysis to calculate the maximum value this segment can create.